The US economy added 157,000 jobs last month, which was slightly below forecasts, but the number of new jobs at the end of 2012 was revised up significantly, official data has shown.

In November and December, the Labor Department’s revised figures showed that 127,000 more jobs were created than initially thought.

But the unemployment rate ticked up to 7.9% in January, from 7.8% in December.

In 2012, an average of 181,000 jobs a month were created, the data showed.

The news helped lift shares on Wall Street to levels not seen since before the financial crisis. In early trading the Dow Jones index rose above 14,000 for the first time since October 2007.

The unemployment rate is based on a survey of households, while the job creation figure is taken from a survey of employers.

On Wednesday, government data indicated that the US economy unexpectedly shrank at an annualised rate of 0.1% in the fourth quarter of 2012.

Meanwhile, an industry survey on Friday said that the US manufacturing sector grew in January at the fastest pace for nine months.

The latest purchasing managers’ index from financial data firm Markit rose to 55.8 last month, up from 54 in December. A reading above 50 indicates growth.

Markit said that its latest survey “suggests the underlying health of the industrial sector continues to improve, and rising production will help the economy return to growth in the first quarter, provided there are no set-backs in coming months”.

‘Positives and negatives’

The Labor Department said that in January, jobs were created in retail, construction, healthcare and wholesale trade, but jobs were lost in transportation and warehousing.

Employment in retail rose by 33,000, compared with an average monthly gain of 20,000 in 2012.

Employment in construction rose by 28,000. The Labor Department said that the industry had created 296,000 jobs since falling to a low in January 2011, but added that the current level of employment was still some two million below its previous peak in April 2006.

There was little change in manufacturing employment, which has been essentially flat since July 2012.

On the downside, couriers and messengers lost 19,000 jobs, after strong seasonal hiring in November and December came to an end.

Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank in New York, said: “Like most of our jobs reports, it seems like every month, there is something for everybody in this one – there are positives and negatives.

“It was certainly below expectations and a slight negative that we saw a tick up in the unemployment rate from 7.8% to 7.9%, especially with the labour force participation rate staying where it is, which suggests there aren’t a vast influx of those unemployed/underemployed coming back being job seekers. That was disappointing.”

BBC News – Business

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